China set to be major sourcing centre
( 2003-08-02 14:38) (China Daily HK Edition)
A more lenient policy on foreign-funded purchase firms is expected to make China a more attractive global sourcing centre.
A senior official from the Ministry of Commerce said foreign companies will be allowed to set up solely-funded purchase centres to buy products for overseas use in select areas of China; and enjoy the same privileges as domestic companies.
The State Council has approved the policy and the Ministry of Commerce is working on the practical regulations, the official said.
The government was lifting controls as more multinationals were including China in their global purchasing networks and the previous policies failed to meet their needs, the official noted.
Foreign firms are currently allowed to establish Sino-foreign trade joint ventures and solely-funded logistics companies in China to operate import and export businesses.
Lu Renbo, an expert with the Development Research Centre at the State Council, said the new policy will further propel China on the road to becoming an international procurement centre.
Products labelled "made in China" are likely to have more acceptability in overseas markets by entering the purchasing systems of multinationals, Lu added.
The top three chain store retailers in the world - Wal-Mart, Carrefour and Metro - all do a considerable amount of purchasing in China.
Products purchased by Wal-Mart in 2002 were valued at US$12 billion and are set to hit US$15 billion this year; while Carrefour spent US$3.5 billion in the same year and plans to double that this year.
"The quality and price of 'made-in-China' goods already possess strong competitiveness in the international market," said Zhang Yiguang, manager of Carrefour's purchase office in China.
"With China further reducing customs duty and cancelling export quota limitations, overseas chain groups like Carrefour will buy more," Zhang said.
French retail giant Carrefour has set up purchase outlets in 11 Chinese cities, making the nation its largest purchase base in Asia.
"A growing number of domestic enterprises will get proper market information and management expertise through co-operation with multinational sourcing centres," Lu said.
Attracted by the increasingly-large shopping lists of multinationals, major cities such as Shanghai, Shenzhen and Tianjin are competing to be sourcing hubs.
Shanghai, for instance, now has 38 purchasing panels set up by multinationals; and plans to set up a new exhibition centre, copying an idea from AmericasMart in Atlanta - the largest wholesale market in the United States - to turn the city into a global procurement hub.
Shenzhen - backed by Guangdong's manufacturing strength - is also eyeing a big slice of the cake.
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